Swiggy shortlists 7 investment banks as advisors for 2024 IPO
Swiggy, the major rival of Zomato in the food delivery service has chosen seven investment banks to advise on its much-anticipated initial public offering (IPO) set for 2024, according to Moneycontrol. It is anticipated that Kotak Mahindra Capital, Citi, and JP Morgan will assume leading roles in the transaction. Meanwhile, Bofa Securities, Jefferies, ICICI Securities, and Avendus Capital will potentially join the final IPO syndicate. The IPO is estimated to be valued at around $1 billion.
Confidential filing and timeline for IPO
The company aims to submit a confidential draft red herring prospectus (DRHP) by March 2024. If market conditions are favorable, the IPO could be launched between July and August 2024. The Securities and Exchange Board of India (SEBI) implemented confidential filings in November 2022, enabling businesses to keep their offering documents private until their IPO plans are finalized.
Swiggy's valuation and fundraising history
Swiggy's most recent disclosed fundraising round took place in January 2022, raising $700 million at a valuation of $10.7 billion. However, following two consecutive markdowns, investor Invesco valued the company at roughly $5.5 billion, while Baron Capital estimated it at around $7.3 billion. Swiggy's other investors include Alpha Wave Global, Qatar Investment Authority, and Prosus. The current market capitalization of Swiggy's publicly traded competitor Zomato is Rs. 1,08,189.57 crore as of October 8.
Swiggy's profitability and quick commerce segment
Swiggy revealed that its food delivery business became profitable in the March quarter of FY23, excluding employee stock option (ESOP) expenses. In a May 18 blog post, Swiggy's co-founder and CEO Sriharsha Majety announced that the company's quick commerce division, Instamart, is on track to reach contribution-margin break-even in the coming weeks. E-commerce firms use this metric to convey the profitability of their business on a per-order basis, excluding fixed costs and marketing expenditures.
